Chancellor to offer extra tax-free ISA allowance

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Chancellor to offer extra tax-free ISA allowance

The Chancellor Jeremy Hunt is planning to introduce an additional ISA allowance to encourage investment in British companies. The extra tax-free allowance will apply to investments in companies listed on the London Stock Exchange as well as those listed on the UK Stock Exchange. Policy makes hope this would help revive the London Stock Exchange after many big name companies announced plans to leave for the New York Stock Exchange. Ministers are also looking at a new type of ISA that will let savers keep both cash and stocks in the same account. At present, there are cash ISAs and stocks and shares ISAs, but these are different types of accounts.

To invest up to £20,000 a year in ISAs, a person can also earn up to £20,000 a year without paying any tax or interest. In 2020 to 2021, over 12 million ISAs were opened, with high interest rates encouraging Britons to open more savings accounts. The Bank of England has held the base interest rate at 5.25 percent, despite the announcement of a lowered interest rate last week.

At the time of writing, the top-paying easy access ISA is Leeds Building Society and Chorley Building Society, both of which pay 4.8 percent, according to Moneyfactscompare.co.uk. Savers opting for an ISA with Melton Building Society can get a top 5.05 percent. The announcement comes after the Chancellor announced his Mansion House reforms to open up pension funds to more investments in stocks.

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